The Property Podcast

The Property Podcast is the podcast for all property investors, new or experienced. Rob Bence and Rob Dix discuss a different property topic and property news item every week, passing on their knowledge and experience to the listeners. They both invest in UK property so they practise what they preach. No hard sell, no bull, just straight-talking property investment advice!

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We're very excited to announce that Rob D's new book came out yesterday and we may be biased, but we think it is his best yet. In this week's special episode of The Property Podcast, we are going to discuss 'How to be a landlord', with tips from the book, and from all sorts of other places.

Also, we have Meetups next week. The evening's are lighter so there's no excuse not to join your nearest get together. Find all the details here.

You'll need to listen to the episode in full to get all of this week's tips and info, but here are some notes you may want to jot down.

You can make property management a lot easier with some little tricks and processes.

Communicating with tenants:

Writing is better than phone

Do whatever’s easiest for them - WhatsApp group, text, even Facebook

You don’t have to give out your phone number - Skype or switchboardfree

Set out ground rules at the start about when you’re contactable, and stick to them!

Chasing up rent:

Ideally use direct debit - you’ll know it’s set up properly

Diarise rent date and make contact on the same day if it doesn’t come in

Have a process: e.g. text day 1, call day 3, final warning day 5

Don’t fall for sob stories

If you have RGI, make sure you notify them in line with T&Cs

Dealing with emergencies:

Define “emergency"

Instruct tenants about what to do in an emergency. Often, calling you isn’t the best thing to do

Communicate clearly around damp and condensation - explain the difference

Use routine inspections to look for condensation, and also look for early signs of repairs that will need doing (including external)

Inspections:

Quick check of each room

Check smoke alarms

Visually inspect electrics

Look for fire risks

Look for condensation

Look for early signs of repairs that will be needed (including external)

Conclusion:

Work smart, not hard

Use checklists to get the best result every time

Be proactive and stop issues from happening in the first place

Oh, and of course the first thing you need to do is purchase a book that tells you exactly How to be a Landlord, right? Funnily enough, we know just the book.

News story: General Election

Obviously the biggest news story of the week is Rob's new book but we also gather the Prime Minister has called a snap General Election. We'll obviously keep you fully up to date over what this means for you in property terms.

NEED MORE ANSWERS?

The Property Hub Summit is the place to get all your questions personally answered by Rob & Rob, and build a network of other smart, motivated investors.

Over the course of a full day at a swanky hotel we'll help you set your goals, form a plan to get you there, overcome your obstacles, and give you the support system you need to make sure nothing gets in your way.

Just don't hang around - there are only four Summits each year, and just 16 places available at each!

What makes the perfect rental property? This week The Robs give their tips on what to do and what to avoid, in order to create the ideal rental property for both you and your tenants.

What is more trouble than it's worth? What is an absolute essential? The Robs give you their take on how to make your property work for you and ensure it gets tenanted quickly and with no fuss.

In other news, we're putting the finishing touches to the next edition of the magazine, it will be with you very soon and includes and interview with Grand Designs presenter McCloud (yes, we're pretty excited about that too). PLUS there is a webinar coming up just for magazine subscribers which you will be very excited about, so watch this space.

Rob D has finally completed his new book 'How to be a Landlord' and we all think it's his best one to date. Keep an eye on your inbox for news on that very soon.

Now, back to the subject in hand this week - what do you need to do to create the ideal rental property?

Flooring:

- Good quality laminate is good for kitchens, bathrooms and high-traffic areas. Make sure it won’t easily rip or warp, don't skimp.

- Avoid as much as possible - including appliances if you can get away with it

General:

- Don’t impose your own taste! Keep it simple

- Don’t over-spec. Rental refurb is very different from a flip (or your own home)

- Be active in overseeing the project

News story: Rogue Landlords Beware!

There's no bad landlords round here of course, but this will definitely be a big issue for those who are not playing fair and by the rules. Can't be a bad thing, right? Absolutely, provided that it is correctly administered of course! Read more here.

Resource of the week

So this week's resource of the week is commutefrom.com which helps you decide where to buy a house around London. It tells you which stations are within your preferred commute time of the central London station nearest to your work. It also tells you information like the average house prices, crime rates, and schools in the area. Clever stuff, huh?

Continue the conversation over in the forum

What did we miss? Did you disagree with any points? What do you always make sure you do?

NEED MORE ANSWERS?

The Property Hub Summit is the place to get all your questions personally answered by Rob & Rob, and build a network of other smart, motivated investors.

Over the course of a full day at a swanky hotel we'll help you set your goals, form a plan to get you there, overcome your obstacles, and give you the support system you need to make sure nothing gets in your way.

Just don't hang around - there are only four Summits each year, and just 16 places available at each!

Last week it was Scotland v England (or Rob D v Rob B) at the Meetups as Rob D ventured to Edinburgh to our brilliant Meetup there, led by Karen & Bill. Rob B took over the helm at the King's Cross Meetup and both locations were very busy.

Rob D spent a bit more time putting the finishing touches to his new book 'How to be a Landlord' but we'll tell you more about that over the next couple of weeks.

Now on to this week's big topic - all about lease hold.

Something that puts some people off - and fear often comes from lack of knowledge. So let's get educated.

What is leasehold?

You don’t own the land - you lease the land for a period of time. At the end of that time it reverts back to the freeholder if you don’t renew

Typical lease terms are anything from 100 to 999 years

You pay ground rent every year as payment for the lease

The lease has conditions about what you can and can’t do

Most common for flats, increasingly new build houses too

What you need to know

Lease extension is always possible and follows a set formula - BUT

Gets more expensive with under 80 years left - marriage value

Under about 60 years becomes hard to get mortgage

Things to check before you buy:

Length of remaining lease term

Ground rent, and if it increases after period of time

Any restrictions - like not being able to sublet!

Service charge is a bit different but this is important too

Get your solicitor to look over the lease in detail

How to extend:

Extension is always for an additional 90 years, with no ground rent payable for this new 90 years

Get a specialist valuer to value the extension and a solicitor to serve notice on the landlord, offering terms and how much to pay

Landlord has 2 months to respond, either accepting or stating their own terms

Negotiate. After 2 months either party can apply to tribunal for decision

Wait for tribunal decision, which is final

Can take a year or more from start to finish by the time you’ve waited for various deadlines

If it’s close to 80 years and you’re buying, get the vendor to start the process and transfer it to you because you can’t do it in first 2 years

How to make money from leases:

Buy properties with short leases and extend them. Will need to be cash buy or bridging until you’ve done the extension. Make sure there’s a profit even after the extension costs.

Buy freeholds. Ground rents give an income stream.

News story: Household savings ratio falls to record low.

This is a bit worrying in itself, but we're particularly concerned given that mortgages are cheaper than ever. What will happen when the cost of mortgages goes up? Take a look at this story here.

Resource of the week

This week's resource of the week is Pocket Explore. This is an extension of a previous ROTW Get Pocket. Explore Pocket takes this a bit further and helps you find high quality blogs on any given subject. Check it out.

NEED MORE ANSWERS?

The Property Hub Summit is the place to get all your questions personally answered by Rob & Rob, and build a network of other smart, motivated investors.

Over the course of a full day at a swanky hotel we'll help you set your goals, form a plan to get you there, overcome your obstacles, and give you the support system you need to make sure nothing gets in your way.

Just don't hang around - there are only four Summits each year, and just 16 places available at each!

In April 2009 they fell to 0.5% and stayed there until a further cut to 0.25% last year

Why are rates so low?

To promote consumer demand. You’re more likely to spend money if you get little return on saving it

To boost asset prices, which increases willingness to spend

To make it cheaper for companies to invest in growing

If we’re being cynical, to make it cheaper for the government to service its own debts!

How people misunderstand interest rates

An increase in your mortgage from 2% to 3% doesn’t sound like much, but it’s a 50% increase

If you borrow £200k at 2%, your monthly interest payment is £334

When it increases to 3%, the payment goes up to £500

This is what Alastair was referring to. It’s easy to make investments work when the finance is so cheap. But when it’s not so cheap, it’ll be much harder for investments to stack up

The PRA rules will help for new investments because they get stress tested at 5.5% anyway

Investors who’ve been on trackers since pre-crash and Owner-occupiers could find themselves in big trouble

What happens if rates go back to double-digits?

Unlikely because rates are set by BOE now

Also, rates tend to rise to combat inflation. Inflation is the result of more demand than supply (roughly speaking), and we seem to be moving into an era of low demand demographically

There’s been huge asset price inflation as a result of QE and low rates (hence demand for assets), but this hasn’t filtered down into the real world and seems unlikely to do so

So there seems little prospect of rates getting really high. But they will go up from where they are now…

So how worried should we prepare for rates rising?

Rises will be mitigated by banks lending at more competitive rates. With rates as low as they are now, they’re making more margin than they used to

Stress-test up to at least 5% – you have to if you’re borrowing anyway

If you’re sitting on properties that only cashflow because you’re on a very low rate, make plans to deal with that before rates rise again

Conclusion

Rates will rise from where they are, even if they don’t get up to double digits – and even when they were that high, it wasn’t for very long

Itwillbe harder to make investments add up so finding and adding value will be more important than ever

Don’t kid yourself that this is normal! Plan for rates to be higher, then enjoy them while they’re so low

News story: Warren Buffet is also a shrewd property investor

Billionaire Warren Buffet may not be known for his property investments but unsurprisingly he hasn't ignored property all together. He is well known for his long term approach to investment generally, and he's applied that same way of thinking to this property investment which has done amazingly well for him.

Resource of the week

“Back Again?” is a Chrome extension that tracks how many times you’ve visited a page each day.

NEED MORE ANSWERS?

The Property Hub Summit is the place to get all your questions personally answered by Rob & Rob, and build a network of other smart, motivated investors.

Over the course of a full day at a swanky hotel we'll help you set your goals, form a plan to get you there, overcome your obstacles, and give you the support system you need to make sure nothing gets in your way.

Just don't hang around - there are only four Summits each year, and just 16 places available at each!